Tag: Asia

Liberalization process in India

Posted by | Aug 14, 2007 | |

After a long period of a command and control regime, we have started moving towards a market economy. But the reforms in that direction are still incomplete. Not only do controls survive in several areas, but surprisingly there are still policy and legislative initiatives emanating from ministries that would appear anachronistic in today’s policy environment.
At the heart of the market economy lays the principle of free and fair competition. Competition maximizes consumer surplus and offers wider choice and better prices. It improves efficiency, both allocative and productive efficiency, and in both the static and dynamic sense. It pushes enterprises into innovation and as, Schumpeter states; it creates gales of creative destruction.
Liberalization has contributed to India’s transition from dismal growth rates to the present rate of 9 pct, among the highest today in the world. After decades of being served sub-standard goods, the Indian consumer is experiencing the benefits of competition in sectors such as automobiles, consumer electronics and durables, telecommunications, insurance, and so on.
These can be prevented only through the enforcement of the Competition Act, which is awaiting certain amendments. India is amongst the very few economies today that do not have an active competition law. To enable the economy and the consumer to reap the full benefits of vigorous competition, it is imperative to make the Competition Commission fully functional as early as possible after the Act has been amended.

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ABX adds flights in Asian market

Posted by | Aug 14, 2007 | |

ABX Air Inc. and cargo delivery competitors including FedEx Corp. and DHL are hustling to expand their services in fast-growing Pacific and Asian markets.

The companies are buying aircraft, or even competitors that already operate in Asia, to serve lucrative U.S.-Asia or intra-Asian routes. The focus is on freight hauled in containers aboard cargo aircraft, either with international or intra-continent range.

Wilmington-based ABX Air has begun a two-year agreement to support Asian cargo operations of All Nippon Airways Co. (ANA) of Japan. ABX has deployed two Boeing 767 freighters, and recently flew its first cargo flight for ANA from Osaka, Japan, to Dalian, China. ABX expects annual revenue of USD 22 million from its agreement to support All Nippon Airways.

ABX also said last week that it will spend USD 23 million to buy a Boeing 767-200 long-range aircraft from Air China Ltd. for international cargo service.

FedEx, the company that pioneered overnight delivery of small packages in the United States, has begun next-business-day delivery service available to customers throughout China. FedEx also spent USD 400 million to buy the DTW Group’s domestic express network in China and DTW’s 50 percent share of an express delivery joint venture with FedEx.

U.S. delivery companies also are competing for business in Korea, Taiwan, Hong Kong, Vietnam, Singapore and Malaysia.

In June, DHL said it bought a 49 percent interest in ASTAR Air Cargo, a Florida-based airline that operates out of DHL’s Wilmington hub and serves customers in the United States, Europe and the Middle East. DHL also invested in Polar Air Cargo Inc. of Purchase, N.Y., to improve express delivery service from the United States to Asia.

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Fidelity acquires 7 pct in Transport Corporation of India for Rs 530 million

Posted by | Aug 13, 2007 | |

Fidelity Investments International has picked up a 7 pct stake in Transport Corporation of India (TCI), the Delhi-based express logistics company, for Rs 53o million. TCI will issue equity shares of Rs 2 face value to Fidelity Investments at Rs 105.25 per share, in accordance with Sebi guidelines for preferential issue.

Post-issue, Fidelity’s stake in TCI would increase to nearly 10 pct of the paid up equity. TCI’s executive director Vineet Agarwal said: “The amount raised will be utilized to fund the expansion of TCI, specifically for building capacity in the warehousing space and setting up information technology (IT) systems.” Earlier, in 2006, TCI had announced expansion plans requiring Rs 4500 million of investments in warehousing, fleet upgradation and expansion, shipping and IT systems.

TCI intends to raise another Rs 600-700 million through sale of equity in the following year. “Our plan was to raise almost Rs 1200 million in two stages through equity dilution. The first stage has been completed. We will raise another Rs 700 million within six to nine months,” said Mr Agarwal.

1 GBP = 81.4266 INR

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DPJ, People's New Party to submit bill to freeze postal privatization for 1 year

Posted by | Aug 13, 2007 | |

The opposition Democratic Party of Japan (DPJ), which became the largest bloc in the House of Councillors as a result of the July 29 election, is set to submit to the chamber a bill that would freeze postal privatization for one year.

The DPJ will co-sponsor the bill with another opposition party, People’s New Party, DPJ officials said.

Over the one-year period, the DPJ intends to work out bills to review the privatization of Japan Post scheduled for Oct. 1 this year.

A package of postal privatization bills were passed into law after the ruling Liberal Democratic Party won a landslide victory in the 2005 House of Representatives election.

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Indian private couriers not to lower rates

Posted by | Aug 12, 2007 | |

Even after a major tariff revision by the department of posts (DoP) in the below 500gm segment of courier, private players are in no mood to lower rates.

Eyeing a larger share of the Rs 50,000 million business in the below 500 gm segment, DoP reduced tariff in the sub-50 gm segment of the local speed post by 40 pct last month from Rs 20 to Rs 12. The new rate is inclusive of service tax and education cess.

While courier majors like XPS charge Rs 30 for the below 250 gm segment and Rs 50 for the sub-500 gm segment in the same region, department of post charges vary from Rs 12 and Rs 20.

XPS charges Rs 50 for sub 250gm and Rs 75 for below 500gm for the rest of the country. Speed Post charges for courier, other than local; vary from Rs 25 to Rs 80.

Mr.K Prabhakar, president & CEO of XPS, a multimodal express logistics company, said, “We serve a niche customer segment which is driven by service quality rather than price. We don’t see any impact of the decision taken by the DoP.”

According to experts, while majors like Gati and XPS have their niche market, the decision would adversely effect local, unorganized players, who operate on factors such as price rather than service delivery.

Size of the organized sector in the Rs 100,000-million courier industry is about Rs 7,100 crore. Almost 65- 70 pct of the business for the courier industry comes rom the below 300 gm segment. A mere less than 30 pct business comes from the above 500 gm segment.

Gati recently launched value-added services like Café d’eliver and IC -Zip to provide multi-modal solutions to customers.

1 GBP = 81.4266 INR

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